Is There a Toyota in the Future of the Top 100?

John G. Swanson
February 15, 2007
COLUMN : Opening Remarks | Channels
The first car I remember riding around in was a Vista Cruiser. My dad was an Oldsmobile guy, and over the years as I grew up, we had a Delta 88 and a Cutlass. At some point, the family added a second small car—a used Fiat. That was followed up by a Datsun, and my parents have been driving Japanese ever since. I think they’re on their fourth Camry now—and if my dad yearns for anything, it’s a Lexus.
My folks are not exactly trendsetters, so when I heard predictions that this year Toyota would surpass General Motors as the world’s number one automaker, it was no great shock to me. In some ways, it’s surprising it’s only happening now.

When gas prices shot up and we saw the first surge of small Japanese cars, people were predicting Toyota would one day surpass GM. It probably would have happened sooner if America hadn’t fallen in love with the SUV.

What does this have to do with the window and door industry? Perhaps not much. The Toyota stories caught my attention in part because I was working on this year’s Top 100. Since we do the Top 100, one question I’m often asked is, “Who is number one in windows and doors?”

My answer is usually, “first, it depends upon what you’re counting, and second, all I can offer is a guess.” You’ll get different answers if you’re asking about windows only, windows and patio doors, windows and all types of doors, etc. The answers then probably vary, if you’re talking about residential only or all applications, and finally if you’re looking at North America or worldwide. You can get even more various answers if you do breakdowns by material.

Here are some of my guesses for North America. If you were talking about the biggest producer of residential windows, I would say it’s Andersen—particularly now that they own Silver Line. If you’re talking all types of window and door units, it’s probably Jeld-Wen. If you’re talking doors only, it’s probably Masonite. Again, those are just guesses.

Looking worldwide, I’d throw in one future possibility into the mix. That’s Japan’s YKK. Better known as a zipper maker, the company actually gets more than half of its $5 billion in annual worldwide sales from its architectural products group, which makes both residential and commercial windows worldwide. On its Web site, YKK states it wants to be the world’s number one window manufacturer, and in 2005, the year it opened its first residential window plant here, its annual report noted it wanted to be the top window producer in Japan, China and the U.S. So, the shift seen in the automotive industry is not out of the question here. 

The Toyota stories didn’t stick with me because I foresee the emergence of a new Japanese powerhouse in our market. Actually, I’ve already heard predictions that it won’t be long before a Chinese company is the world’s number one automaker, and I see that as a definite possibility on the window and door front too.

What I did find most interesting about the Toyota stories were a couple of articles I saw discussing market share. GM, the big consolidator of its day, once had a nearly 50 percent market share in the U.S. That number has steadily eroded. Ford’s has too, while DaimlerChrysler has never been as high, but is steadier now. Toyota, of course, has been growing its share consistently for decades, but now, automotive industry analysts suggest, all these companies must envision a future where 20 percent is about the best any one of them can hope for, as far as market share.

I don’t know if any of the window and door companies I mentioned above has a 20 percent market share here, even for a particular product segment. It’s a possibility. I found the automotive market discussion interesting, however, because the North American window and door industry could be looking at a similar future—with four or five major brands each representing 15 to 20 percent of the business and the remaining players fighting for the rest (of course, I expect the window and door business will always have many more “remaining players.”) Or, maybe we’re there now?

The Top 100 always provides clues to answer such questions, but as long as most of our industry leaders remain in private hands, we’ll always be guessing. In the meantime, Toyota’s rise to become number one in the automotive world is a reminder that things change. Consolidation may seem like a slow moving, all-powerful force, but in the automotive business, globalization has lead to deconsolidation. Within our industry, it means somewhere near the bottom of our Top 100 could be a company that someday makes it to the top. Or, maybe a completely new face will emerge.